Investment Officer talks African aid

A leading investment officer from the African Development Bank spoke Thursday about the difficulties of development aid in Africa.

Oumama El Kettani, who gave a talk entitled “Development in Africa: What Role for International Financial Institutions?”, said Africa receives 46 percent of total aid funds worldwide — making it the most aid-dependent continent. Yet due to the level of political and infrastructural instability in Africa, organizations that provide aid are often unable to ensure their contributions are applied to the benefit of the nations involved. Because aid that has traditionally aimed to alleviate poverty or provide assistance in emergencies has often not led to longterm development, El Kettani said many international financial institutions are working to support economic growth through a mix of loans, grants, equity investments and other measures.

“The idea of aid and development is really a gray area,” El Kettani said. “There are projects that are very successful on the ground, but at the same time, there are a lot of political pressures for any project.”

The 54 nations in Africa receive an estimated $26 billion in aid per year, and some countries receive more than 100 percent of their individual budgets from aid, El Kettani said. She added that access to such large sums of money often contributes to political corruption, as governments are inclined to operate primarily on aid money rather than investing the funds they receive into economic growth.

Because of the historical ineffectiveness of aid and humanitarian assistance, El Kettani said international financial institutions are focusing more and more on development co-operation by working with both public and private sector agencies. As a result, aid money is becoming increasingly scarce, she said, and financial institutions are monitoring countries’ use of grant money.

“African countries can benefit from these grants, but they have to prove why,” El Kettani said.

The African Development Bank aims to increase investor interest in private-sector growth, which El Kettani said is limited due to rampant political uncertainty in Africa, such as the Arab Spring. But government-focused aid remains a controversial topic in Africa, because organizations struggle to ensure their funds are being properly used on the ground, El Kettani said.

The talk received positive reviews from two audience members interviewed. Justin Scott GRD ’13 said he appreciated the opportunity to hear from an investment officer working directly on issues of financial assistance in Africa.

“It’s really nice to have people come in while they’re still employed by big international institutions and hear them speak frankly about controversial aspects of their work,” Scott said. “These are huge issues and Africa is often marginalized in this discourse.”

The talk was one installment of the Council of African Studies’ Brown Bag Speaker Series, which hosts weekly lectures on Africa.